India resists US pressure to ramp up wheat imports

Refusing to buckle under US pressure to buy more wheat, the Indian government will review wheat imports only in May, after domestic wheat procurement is over, Agriculture Minister Sharad Pawar said.

As of now, the country will import only 5,00,000 tonne of wheat, and also the country's farm policies cannot be dictated by the US, he said.

"My policies are not decided by American agriculture. Our present decision is to import only 5,00,000 tonne," Pawar said on the sidelines of a seminar on potential of e-agriculture in Baramati, Maharashtra, on Saturday.

The minister's remarks assume significance, as the US has stepped up lobbying to sell more wheat to India.

Ever since AWB of Australia bagged the contract to sell 5,00,000 tonne of wheat to India, top officials from the US Agriculture Department have been making a strong pitch to clinch a deal with the agriculture ministry, in case the government decides to import more wheat.

US officials have said that India may have to import additional 1.5-2.0 million tonne of wheat in 2006, apart from the 5,00,000 tonne already contracted.

They met agriculture ministry mandarins last week to convince them that the US can meet India's wheat requirements.

India is importing 5,00,000 tonne of wheat from Australia at US $178.75 a tonne on cost and freight basis.

The US was among the eight bidders in the wheat tender floated by the government-owned State Trading Corporation.

Allaying fears of wheat shortage, Pawar said, "There is no shortage of wheat. We are able to fulfil the requirement of the country, but the buffer stock is low. Hence the import."

Pawar said despite low buffer stock, the decision to buy more wheat will be taken only in May.

"I will see what is my procurement and what is available in my kitty. If sufficient food grains are not there, then I will not hesitate to import," he said.

According to the estimates provided by traders, India's wheat output in 2006 is pegged at 70-71 million tonne, down slightly from 72 million tonne in 2005.

Erratic weather conditions in Madhya Pradesh and Punjab have been cited as the reasons for the fall in production.

Foreign wheat to cost less

The cost of importing 5,00,000 tonne of wheat from Australia will not be more than the cost of domestic wheat in the southern states, Finance Minister P Chidambaram said on Monday.

Wheat imports will also have no impact on procurement or prices in the northern parts of the country, he said.

After adding labour, transportation charges, administration charges, among others, to the wheat minimum support price of Rs 640 per 100 kg, indigenous wheat in the southern states costs about Rs 1,030 per 100 kg.

"Imported wheat would cost more-or-less the same at about Rs 970 per 100 kg," Chidambaram said in the Rajya Sabha.

He said the country was importing a very small quantity of wheat for southern states only as a pre-emptive measure.

"We do not want to create a scarcity scare," he said adding that imports will just augment stocks and contain prices in the southern parts of the country.

They will not affect wheat procurement or wheat prices in wheat growing states. Imports will also not have any impact on farmers or the consumers, he said.

The government has decided to import 5,00,000 tonne of wheat, at zero duty, from the Australia Wheat Board at $178.72 a tonne, in five southern ports.

The first consignment of 30,000-35,000 tonne of Australian wheat is slated to reach India by the month end.